Moneyball without the ball

Posts from the ‘Niko Resources (NKO)’ Category

Portfolio Performance

See the end of the post for the current make up of my portfolio and the last four weeks of trades.

Recent Developments

I ended the month on a high note, at a new all-time high after gains this week from Gastar, Tronox, and Entrec, and notable gains over the last month from Axia, Novus, Ainsworth, Equal and Monarch Financial.

Gastar’s rise took place after the company announced a major asset purchase in the Hunton I wasn’t as enthused about the purchase as the market because I didn’t see the purchase price, which worked out to a little under $100,000 per flowing boe, as particularly cheap, but I understand that the move further consolidates Gastar’s position in the Hunton, and that the news that the company’s fifth well was producing 160 bopd on 1/3 of the well lateral was another positive datapoint to the field’s potential.

In the case of Tronox, apparently there is some speculation that Huntsman may be about to make a play on the company. This was reported on SeekingAlpha.

I’m not really sure what drove the share price of Entrec on Friday though I think its more of a sector move. The stock had been floating down on low volume for a couple of weeks. It was anything but low volume on the move up on Friday, trading over 1.6 million shares. Read more

Portfolio Performance

See the end of the post for the current make up of my portfolio and the last four weeks of trades.

Shake-up

In a previous post about Walker & Dunlop I described the consequence of being on vacation while the company announced poor results, which was that I was not able to take advantage of a clear selling situation. The same was the case for Dex Media.

In the past I used the term “good enough investing” to describe what I’m trying to do with my portfolio. I work a full time job, have a life and need a break now and then, and all that means I just can’t be on top of everything. I try my best but I have found it necessary to employ techniques to mitigate this. In particular, I sell stocks when things aren’t working out.

While I’ve had my share of winners over the past month and a half (AIQ, NVS, NCT, NRF, IQNT to name a few), I’ve also had my share of losers (NKO, EXE, VTNC, and the above mentioned duo) with the result being that my portfolio has done not much of anything. While I remain hopeful that both Niko Resources and Extendicare eventually pan out, the fact is that thus far they haven’t. Read more

It’s a huge structural advantage not to have a lot of money. I think I could make you 50% a year on $1 million. No, I know I could. I guarantee that – Warren Buffett

I’m adding a simple year by year and quarterly performance table to the start of every portfolio update. I’ve had the on-line portfolio going for over 2 years now, and I find that the chart is less informative the longer the time horizon gets. The quote, which I have mentioned before, is more of a goal than a statement. Buffett says it’s possible, let’s try to prove him right.

I’ve already written about most of the new stocks that I added in the last month (Ainsworth Lumber, Tronox, Novus Energy,smaller positions in Lightstream Resources and Penn West, and lastly Niko Resources. In this post I will focus on some of the stocks I sold (including most of my large position in YRC Worldwide), and add some thoughts on oil and Canadian oil juniors.

I’m getting this update out a day late so all of the numbers are are of Friday July 19th.

Portfolio Performance

Portfolio Composition

I have been tweeting about my position in Niko for a few weeks now. I built a small position in the $7’s which I added to in the $8’s and $9’s as news on the new gas contract in India has been confirmed. As I’ve said before, I am often slow coming out with posts and updates on all of the stocks I own because it takes time to write these opuses but I do try to make fairly timely updates on twitter when I add new positions or decide to exit others. Feel free to follow me there.

Niko Resources is a pretty simple story. The stock is a former Bay Street darling that has struggled mightily with reserve write downs and exploration disappointments. The stock has been pretty much left for dead by analysts and fund managers who have watched their dollars disappear as it fell from over $100 to less than $10 (bottoming at $5 and change a few months ago).

I owned Niko briefly before Christmas. My short stint with the stock is an example of needing to own something in order to be motivated to think a bit harder about it. After having gone through that process, I sold the stock and wrote the following:

The discomfort I developed with Niko was partially the result of another batch of less than stellar drilling results, but mostly the result of my conclusion that this isn’t the right time yet. The driver of the share price will be the settlement of a new gas price contract in India. I don’t think this is likely to occur until the existing contract expires, which is not until next year. In the mean time Niko will continue to experience production declines in India, and they are open to negative news flow on drilling.

Of course you could argue they are also open to positive news flow, and that’s totally true. But the point is, its a gamble. If they report a hit then I will miss out (though I suspect that such news might get me to jump back in). Absent that, I’m going to keep watching Niko until we get closer to year-end and to where the market can begin to price in a new contract.

Since that time I have continued to watch Niko, and indeed there has been positive news flow on the exploration front (the company had a new significant discovery in India), and terms of a new gas contract were released. And honestly, with all the news that has come out, I would have expected the stock to be higher. Nevertheless, I have been pleased that the stock has traded below where I sold it back in December when, in my opinion, the uncertainty surrounding the company’s outlook was much more unclear. Sometimes the market is fickle and that has given me a chance to get back in. Read more

Portfolio Performance

Short Lived Niko Experience

I wrote about a new position in Niko in a short summary 3 weeks ago. A couple weeks later I sold the stock. What can I say – its part of my process. A lot of times I only get clarity about a stock once I own it. I buy a position, sit on it for a few days or a week, and do some more background and some more thinking on the name. With that my opinion becomes more clear.

The discomfort I developed with Niko was partially the result of another batch of less than stellar drilling results, but mostly the result of my conclusion that this isn’t the right time yet. The driver of the share price will be the settlement of a new gas price contract in India. I don’t think this is likely to occur until the existing contract expires, which is not until next year. In the mean time Niko will continue to experience production declines in India, and they are open to negative news flow on drilling. Read more

Portfolio Performance

Summary

I am going to try to keep to a shorter update but given my track record with brevity we will see how that pans out. The reason I want to keep it brief is that I am attempting to write a Visual Basic program this weekend that will allow me to paste my transactions into an excel spreadsheet and automatically spit out a list of the closed positions, the open positions, and the relevant transaction parameters. I want a better solution than a snapshot of the RBC Practice Account portfolio holdings page; I have no ability to come up with graphs and charts of performance with my current snipit method, the practice account summary has a bug that screws up the book value and gain/loss numbers every time you make a partial sale of a position, which is a real pain, and I want to be able to post a consolidated list of all my closed positions along with their gain and loss, something that is not possible from the practice account (my current method, which has been to post every one of my updates on my portfolio page, is getting to be a little too long).

On the Cliff

The market was a real yo-yo over the last couple weeks but I didn’t really panic much. I have been known to do violent purges in the midst of chaos, but not this time. I was pretty confident that something would get done, either at the deadline or as a result of the steep fall that would occur after it was passed. As it was, things turned out just about in-line with my expectations. Read more

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